The latest quarterly reporting from private equity’s listed giants offers a window into how the market has fared against coronavirus-related turmoil and a rout in oil prices.
We examine some of Ares Management‘s private equity funds in a special series of Private Equity International‘s Performance Watch, which compares the firm’s first quarter 2020 figures with those from the prior three months.
Ares’ private equity assets under management fell 12.7 percent to $22 billion during the first quarter, according to its latest earnings report. This is down 8 percent from Q1 last year.
Its corporate private equity portfolio delivered a negative 9.3 percent gross return last quarter. By comparison, the Dow Jones Industrial Average closed down 23.3 percent for the period and the S&P 500 was down 20 percent.
“Fortunately, as a percent of our firm-wide AUM, we have relatively small exposure to the ground-zero industries – most heavily impacted assets – such as oil and gas, travel and leisure and retail, but we are certainly not immune,” co-founder Michael Arougheti said on a 6 May earnings call.
The firm’s initial response was to focus on understanding the liquidity needs of its portfolio companies and to protect value in the existing book, Arougheti noted.
“On the investing front, we began actively using our dry powder to invest in and trade to stressed assets, while retaining significant dry powder to what we believe would be a long drawn out recessionary environment,” he added.
The interactive charts below depict four of the firm’s private equity fund families based on its two previous quarterly earnings reports. The bubbles are sized proportionately to the size of the fund; toggle between the tabs to see how their performance differed between quarters.
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